It wasn’t long ago, when regional rail-trail conversions were the leading strategy for creating multi-use non-motorized travel corridors, that the biggest opposition came from suburbanites fearing that the bike paths would bring intruders (meaning poor or Black people) into their backyards and lower their property values. Today, as the action has shifted to our reviving cities, there is opposition from low-income residents worried that the neighborhood improvements they’ve demanded for decades – better transit, bike facilities, parks, street lights, new construction – will attract upscale newcomers, raise property values, and cause displacement.
The fears of the suburbanites were always groundless. But, unfortunately, the fears of inner city people – especially in reviving cities such as Boston, NYC, Chicago, and San Francisco – have a strong basis in fact, especially around transportation facilities – a recent study found that rents go up about $43/month for each 100 meters closer to a station. The working class Davis Square where I once hung out disappeared with the new T stop. Planning for the Green Line extension to Somerville’s Union Square has unleashed property speculation and driven up rents. Smart investors are already gobbling up property along Dorchester’s future Fairmont Line.
THE LIGHTENING ROD EFFECT
It’s not that the streetscape improvements, transit access, bike paths, green space, or public buildings are the real cause of the upscaling. Larger demographic, economic, and historic pressures have built up around certain cities like a gigantic thunderstorm roiling with electric charge. The power surge doesn’t flow everywhere – its starts downtown, along the waterfront or on hilltops, in areas with desirable houses or open space, and where it’s possible to easily get to downtown workplaces without using a car, while at the same time easy to use a car to get out of town. Other places, lacking these amenities or having some negative characteristic (too much crime, too many poor people, too Black) are skipped – nationwide, a recent study found that for every “neighborhood that’s gentrified since 1970, 10 have remained poor and another 12 have slipped into poverty….racial composition did in fact have a significant effect.” In those that did gentrify, what moved a run-down neighborhood on to the hit list, or even transformed an undesirable location into something that upper-income people found attractive, was often new public investment. Sometimes small, sometimes major, these local improvements simply provide a lightning rod for the surrounding energy, focusing attention on a particular place and unleashing the creative destruction of profit-seeking.
The recent move of the better-off back into the city may seem like the impersonal and diffuse working out of personal choices and market dynamics. But markets and choices are shaped by policies. The rightward tilt of politics in recent years, both in the US and internationally, has created escalating inequality giving the upper 20% of our own population and the top 1% of many less stable nations enormous unneeded wealth, which they’re using to buy property – driving up prices in their preferred neighborhoods, pushing the next income layer of renters and buyers into other neighborhoods, and ratcheting up price inflation across the entire housing market.
However, the impact of all this can – must, and can only – be also addressed through public policies and programs. In fact, unless public officials begin implementing ways to create more sustainable conditions for middle-income and lower-income residents, our cities are likely to get strangled by their economic “success” – just as the success of Kendall Square has made it too expensive for new start-ups to locate there. True: given our messed up tax system it is new development and rising property values that provides the funds for physical improvements and urban services. But it’s also true that a city’s vitality depends not only on its attractiveness to young professionals and rich investors but also, to an extent we seldom acknowledge, on its cultural (meaning ethnic and racial and place-of-birth) diversity and the presence of the rest of the workforce (meaning middle-income and poor families).
MORE IS NOT ENOUGH
Simply building more will not eliminate the pressure on middle and low-income families. In theory, a gargantuan increase in the amount of new housing would create a more fluid and affordable market. Reform of our damagingly old and dysfunctional zoning laws (unfortunately killed in the most recent Legislatative session by real estate lobbyists) and more intelligent mortgage criteria would certainly help. But it would take nearly 30,000 new units over the next six years to merely keep up with current demand, and many more than that to bend the cost curve down – and only 3,200 are on track for completion in the coming year, almost all of which are downtown luxury condos. We simply can’t build our way out of this crisis. In San Francisco, advocates are promoting a ballot initiative requiring at least 30% of new housing to be reserved for middle- and low-income families. Developers say this ignores the financial reality of new construction. Advocates disagree, saying that the limited amount of developable land makes it impossible to satisfy the high-end market, meaning there will never be significant spillover to middle-income or low-income segments.
Given the growing inequality of our society as a whole, if left to itself the real estate market will continue its current tilt towards the highest end of the luxury market, with negative spill-over effects on everyone else. The solution, therefore, is to change the market by changing the context in which it operates, to intervene in the market to change the profits to be made (or not made) for certain types of development, and to reduce or eliminate market pressure on some percentage of our city’s housing.
THERE ARE WAYS
Success requires using the full range of strategies. The city has to help create more housing in ways that protect its long-term affordability – lowering construction costs by using tax-foreclosed and city-owned land, using limited-equity ownership contracts, subsidizing mortgages in ways that translate into partial public ownership, mortgage pools for low-income borrowers, etc. This also requires an expansion of home-ownership training programs and mutual-support groups to strengthen families and communities. For those unable to afford to purchase, we need family-appropriate (e.g. multi-bedroom) scattered site public housing programs that are well designed and well run as well as more rent subsidy programs – some of which can be negotiated with developers seeking development rights or who have been found in violation of building codes (the offer is to avoid criminal prosecution by fixing up a unit and renting it at below-market levels).
Boston is starting to move in the right direction: there are plans to turn nearly 200 vacant lots along the new Fairmont Line into one- to three-family homes with about 400 units, although it’s not clear that the properties’ financing and ownership will be structured in ways that preserve their long-term affordability or just released into the market. In addition, the city has foreclosure-ownership of two huge lots, the old Cote Ford car dealership site in Mattapan and the three-acre former Maxwell box warehouse in Dorchester. Both provide huge opportunity for both local economic development and housing.
And for those who do want to move out of their old neighborhoods, we need much more aggressive state-wide enforcement of anti-discrimination laws as well as more effective “anti-snob zoning” program in the suburbs.
Those of us who favor expanding opportunities for people to walk and bike, want to increase access to green space in every neighborhood, care about the quality of streets, and believe new construction can help create local jobs – we need to expand our focus and demand that public investment walk on two legs: one leg for upgraded facilities and environment, one leg for population stability and support.
Continue Reading »